While technology has yet again been a central topic of discussion at this year’s World Economic Forum in Davos, Switzerland, there has also been a determined focus on fintech and how financial inclusion is key to meeting the UN’s Sustainable Development Goals by 2030.
In conversation with Charlotte Crosswell, CEO of Innovate Finance, she highlights that the fintech industry is only starting to realise the potential of ‘doing good’ and “we need to continue to help those who believe financial wellness and stability is an unattainable goal.”
Crosswell adds: “This is key to meeting the UN’s Sustainable Development Goals, and ensuring social wellbeing is part of the financial decision-making process.”
The Innovate Finance CEO will be speaking at Innovation for Good: Empowering a Generation of Changemakers, an event at Davos on 23rd January hosted by Haus of Fintech and the Financial Innovation Lab at UNICEF, promoting open exchange of ideas and shining a spotlight on those dedicated to determining actionable ways fintech can make a significant impact.
Dr. Jemilah Mahmood, under secretary general partnerships at the International Federation of Red Cross & Red Crescent Societies, a Haus of Fintech partner, tells Finextra that fintech “has helped evolve financial inclusion beyond the simplistic idea of having a bank account.
“It has placed financial services literally in the palms of those who were previously marginalised and underserved. But questions remain on the ethics of experimentation and shared value collaboration between humanitarian actors and private partners.”
In 2020, the fintech industry will need to engage an entire system of approaches and reduce the number of siloed innovations that are emerging. “Fintech will also drive the significance of having sovereign digital identities for undocumented populations,” – providing a legal identity for all was promised as part of Goal 16 of the UN SDGs.
Focusing on Dr. Mahmood’s point on “the ethics of experimentation”, while data is increasingly prevalent in the digital world of today, the threat of data breaches, identity theft and fake news is resulting in consumer distrust.
On a similar note, Crosswell also believes that the impact of data bias will remain at the forefront in 2020 and the coming years, but for fintech to thrive as a sustainable sector, this issue needs to be addressed. “The rapid growth and adoption of fintech is uncovering issues around biased data that algorithms are amplifying and multiplying, resulting in discrimination on certain groups of people.
“There is a common misconception that algorithms using computational logic are free of bias. If the base data set used contains flaws, these are replicated repeatedly, potentially having an extremely detrimental impact on the users.”
The solution: ensuring diversity within the developer teams who create algorithms, which will help avoid the discriminatory effects of AI on certain groups of people.